OMV second quarter profit falls on Libya output disruption

OMV second quarter profit falls on Libya output disruption

JONATHAN TIRONE

VIENNA, Austria (Bloomberg) -- OMV AG, reported a 37% decline in second-quarter profit because of production disruptions in Libya.

Net income fell to 202 million euros ($270 million), while sales dipped 12% to 9.3 billion euros, Vienna-based OMV said on Aug. 12 in a statement. Analysts on average had estimated a profit of 168 million euros on sales of 10.6 billion euros, according to data compiled by Bloomberg.

OMV had agreed to form a venture with Russia’s OAO Gazprom in June for building a gas pipeline to the European Union, cutting transit dependence on Ukraine. The conflict between Russia and Ukraine has impeded the construction of the South Stream pipeline, which would run under the Black Sea and through the Balkans before ending in Austria.

“Our participation in the South Stream project will play an important role in the future to safeguard the security of gas supplies for Europe and, particularly, for Austria,” OMV’s CEO Gerhard Roiss said in the statement.

OMV increased total second-quarter production, despite instability in Libya and Yemen, he said. Daily gas production rose 2% based on higher Norwegian volumes, the company said. The company forecasts production of about 310,000 boepd for the rest of 2014, even without Libyan production.

OMV’s Roiss signed the South Stream agreement with Gazprom’s Alexey Miller on June 24 in Vienna during a state visit by Russian President Vladimir Putin. The companies may pursue more cooperation through a Gazprom stake in Austria’s Baumgarten gas hub, Miller said.